http://www.wired.com/news/business/0,1367,36749,00.html
A Data Sanctuary is Born
by Declan McCullagh (declan {AT} wired.com)
5:00 p.m. Jun. 4, 2000 PDT
WASHINGTON -- A windswept gun tower anchored six miles off the stormy
coast of England is about to become the first Internet data haven.
A group of American cypherpunks has transformed the rusting fortress,
erected by the British military during World War II to shoot down Nazi
aircraft, into a satellite-linked virtual home for anyone looking for
a secure place to store sensitive or controversial data.
The founders of HavenCo, which will announce operations on Monday,
believe the concept will appeal to individuals and businesses looking
for a "safe haven" from governments around that world that are
becoming more and more interested in Internet regulation and taxation.
It's for "companies that want to have email servers in a location in
which they can consider their email private and not open to scrutiny
by anyone capable of filing a lawsuit," says Sean Hastings, the
32-year-old chief executive of HavenCo.
Hastings says that because a 1968 British court decision effectively
recognized the basketball court-sized island as a sovereign nation
called Sealand, HavenCo can provide more privacy and legal protections
then anyone else on the planet.
To create HavenCo -- which will offer Linux servers for $1,500 a month
-- the founders signed an agreement with Roy Bates, the quirky "crown
prince" of Sealand who landed on the abandoned platform in 1966 and
claimed it as an independent nation with its own currency, stamps, and
flag.
Bates, a former British Army major, has undertaken a string of failed
business ventures in an attempt make use of the world's tiniest
country -- a platform just 10 by 25 yards that perches atop two cement
caissons in the North Sea.
One plan was to build Sealand into a three-mile-long, man-made island
with an airport and banks. Another venture included working with
German investors to build a $70 million hotel and gambling complex --
a scheme that fell apart with the Germans taking over the fortress in
1978 and Bates regaining control in a dramatic helicopter raid at
dawn.
This time the elder Bates, now about 80 years old, is taking no
chances on his business partners: His son and royal heir-apparent,
Michael, is HavenCo's chief logistics officer and the royal family has
a seat on the board.
But today Sealand's potential adversaries include not merely a few
expansion-minded Germans, but nervous government officials who are
aggressively trying to pull the plug on unapproved offshore
activities.
During a Paris summit in May, for instance, representatives of the
Group of Eight (G8) nations met to hammer out an agreement on
international Net law. "The idea is to produce a global text so there
cannot be 'digital havens' or 'Internet havens' where anyone planning
some shady business could find the facilities to do it," French
Interior Minister Jean-Pierre Chevenement said at the time.
When Sealand was simply an eccentric's hobby, the British government
largely ignored the smallest country in the world. But if HavenCo
becomes a popular destination for gambling, money laundering, or other
socially disapproved activities, governments could move against it.
The Home Office in London could restrict the microwave links that
provide HavenCo with its lifeline to the outside world, and the
companies offering satellite connectivity could come under pressure
from regulators in their home countries. HavenCo could even find its
bank accounts imperiled.
For their part, HavenCo executives say they hope to avoid negative
publicity. "We don't intend to make anyone angry at us. We simply want
to provide online businesses a place with a sane set of rules that are
not constantly changing," Hastings said.
"If larger nations have a problem with unrestricted information flow,
then their problem is with the increase in information technology, and
not with us. They can't put the genie back in the bottle until every
individual on the planet has had their three wishes come true," he
said.
Somewhat ironically, bandits recently set up a fake "Principality of
Sealand" website to sell citizenship to unsuspecting visitors. Spanish
authorities reportedly are investigating a gang involved with drug
smuggling and arms trafficking using those passports.
In a bizarre incident, one "Sealand" passport of dubious origin
surfaced in connection with the July 1997 murder of fashion designer
Gianni Versace in Miami.
The British Embassy in Washington declined to comment on what would
prompt London to take action against the legitimate prince of Sealand.
"What it comes down to is that this is a hypothetical (situation), and
so we cannot speculate on this," said Peter Reed, the embassy's press
officer.
In interviews, U.S. government officials indicated they would take a
more active approach.
[...remainder snipped...]
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